Taking financial advice from RBS is like taking marriage counselling from Tiger Woods.
Why would you trust a bank that couldn’t handle its own affairs to guide you on your mortgage, savings, investments, insurance and the like?
No wonder their marketing focuses on the Nat West brand rather than RBS which is probably tarnished (beyond repair?) with the Government bail-out.
Clearly many people do not realise they are one and the same or at least that is what they will be hoping.
Their previous campaign designed to highlight how their staff give impartial advice to any customers who want an all round review of their circumstances was found to be sadly lacking in impartial advice by mystery shopping.
The recent high-profile advertising campaign on TV and on billboards which shows bank staff visiting customers in their homes and seemingly maintaining friendly and on-going relationships with them may on the surface appear convincing but anyone who has actually had to deal with a bank knows it is far from reality.
Unhelpful staff, lack of continuity, non-advised (and often pushy and inapproriate) sales, unsuitable products – the list goes on.
And just when I thought they were only taking this step with consumers the broker’s brand Royal Bank of Scotland Intermediary Partners (RBSIP), which comprised RBS, Nat West, First Active and at one point The One Account, has jst announced they are re-branding to Nat West Intermediary Solutions (brokers won’t have missed the fact they are no longer Partners as if there was any doubt!).
So perhaps they feel brokers are just as unaware – after a couple of years of dual pricing with some very poor deals being offered to brokers by the Bank, I promise brokers rare only too aware.
Further to previous article on the APS Europe MPPI plan (30/06/09) the on-line version has now been launched giving FSA-authorised intermediaries access to this market-leading product.
Plus commission has been increased to 29% of the premium (less IPT).
All this comes at the same time another provider (Synergy) has announced its current unemployment cover is being withdrawn on 30 September 2009.
Brokers looking to better protect their clients, reduce costs of their clients’ existing policies and earn higher renewal income should apply for an agency.
Do you know any new parents who could you take advantage of a unique offer?
Everyone knows that growing families mean growing responsibilities, and new parents deserve all the help they can get. With this in mind, I’m writing to let you know about a unique new offer. If any of your friends or family is expecting a new baby they could apply for £10,000 free insurance once their baby is born.
£10,000 free life cover for new parents
Basically, the offer is each parent (who applies) will receive £10,000 of free life cover per child until their baby’s first birthday. Joint cover is not available but if both parents apply they could have £20,000 of free life cover. If they have twins this could mean £40,000 of free life cover.
The plan pays out £10,000 if the parent dies on or before their child’s first birthday. It’s really easy to apply, no payment is needed and you don’t even need to provide bank account or credit card details, simply because there are no premiums!
Please call me on 0800 530 0325 or send me a message via this link.
I’d be pleased to have a chat with anyone you know who could take advantage of this unique offer, and show them how simple it is to take an important step towards greater peace of mind. Some terms and conditions and exclusions apply but I can talk these through with them. If they wish, we can also discuss how this free life insurance might fit in with overall protection planning.
At a time when the whole world is telling them to expect more sleepless nights, I’d like to do my bit to help someone close to you sleep a little sounder… on those rare nights when they get the chance!
We are pleased to be able to offer access to a market-leading mortgage payment protection plan designed to pay a mortgage for up to 12 months in the event of accident, disability or unemployment.
The APS Europe Mortgage Payment Protection Plan is available directly to members of the public and through your financial adviser or broker.
Whilst many providers no longer offer standalone unemployment cover or only allow it alongside a new mortgage or remortgage, this policy remains available to new and existing mortgages.
It can be taken as a combined ASU (accident, sickness & unemployment) policy or just unemployment or just accident & sickness.
Unlike most policies out there, there is no minimum six months employment requirement, no job or hobby exclusions and whilst pre-existing medical conditions are excluded, any condition in the preceding 12 months will not be met but once clear for 24 months policy holders are eligible to claim.
And there are no exclusions for conditions a customer should have known about from their past if totally clear.
Many of the exclusions normally associated with with this type of cover are NOT in fact excluded: -
- Unemployment due to dismissal, misconduct or breach of conduct
- Backache or related conditions; most providers use this as a backdoor exclusion by stating they need proof via MRI scan
- Claims relating to HIV/AIDS
- Claims due to cosmetic or non-medically necessary surgery
- ME and post-viral debility
- Claims due to emotional or psychiatric conditions if diagnosed and under the continuing care of a Consultant Psychiatrist
Eligibility is therefore straight-forward and simple: -
Applicants must be UK resident, working at least 16 hours per week, party to the mortgage, not off work due to ill-health at the point of application and inception of cover, over 18 years of age at inception and under 65 at expiry.
So long as applicants are not aware of impending unemployment and are able to sign a simple declaration they may take cover.
Customers can cover the mortgage repayment and mortgage-related insurances (buildings & contents, endowment etc) up to £2,000 per month on the ASU option and up to £1,500 on the A&S or U only options regardless of the customer’s income.
The benefit of such a policy is the ease of applying with no underwriting at application stage with back-to-day-one cover available.
With unemployment at 2.25million and predictions for it to rise to 3million, it pays to have the right cover. Ask for the APS Europe Mortgage Payment Protection Plan.
For the fifth successive year, Swiss Re reported a Life Assurance Protection Gap which, measured in sums assured, remains unchanged, at £2.3 trillion (GBP 2,300 billion). The Income Protection Gap remains at £190 billion in annual benefits.
These are collossal figures showing the population still feels that it either does not need protection or possibly that it cannot afford the cover available.
It is incumbent on both the insurance industry as well as the government to raise awareness, improve understanding and increase take-up of such products amongst consumers.
For what it’s worth here’s a few tips and pointers: -
Life Assurance v Life Insurance – Whilst the distinction between the two has become more blurred and almost interchangeable, in general, the term insurance refers to providing cover for an event that might happen while assurance is the provision of cover for an event that is certain to happen.
A life insurance policy provides cover for a set period of time. If the worst were to happen during that time then the insurance company will be required to pay out the agreed sum to the beneficiary. If the person outlives the term of the policy or cancels mid-term, then the insurance policy will cease and no payment will be made.
Life assurance is different from insurance, and will always result in a payment. This is achieved by combining an investment element along with an insured sum. This means that over time the value of the policy can increase as the investment bonuses are added. If a person covered by life assurance were to die, then the insured sum would be paid out, alongside the investment bonuses which would have accrued over time. If it is necessary to cancel the policy prior to the end of any designated term period, or the death of the life being covered, then once an investment bonus has been added, the life assurance policy will have an encashment value. It is therefore possible to cash in a policy earlier than its usual termination date, in order to collect on the investment portion.
Richard Brown, Chief Executive of Moneynet.co.uk, has explained the confusion between the two terms by stating, “most life insurance companies offer a wide range of insurance and investment services – for example pension, investment funds, investment bonds, car insurance, home & contents insurance, life assurance, and even loans. Sometimes a ‘life insurance’ company will call itself a ‘life assurance’ company but they mean one and the same.”
It is the former, life insurance with no cash-in value that we are focusing on, as an example of pure protection.
Life Insurance – An amount to be repaid upon death to repay a mortgage, loan, an inheritance tax liability (IHT) or any other purpose.
It is preferable to have cover for at least any outstanding liabilities, the main one tending to be a mortgage.
However sometimes given the option between taking cover and not having an additional monthly outgoing, many borrowers, especially cash-strapped first time buyers (FTB), choose to delay taking out life insurance because “it won’t happen me.”
But rather than having no cover at all it should be possible to advise someone that it is better for them to take a smaller amount of cover, which may only cost £5 per month, that may not repay the whole mortgage but upon death of the policy-holder will provide an amount of money that would take care of short-term financial worries (several mortgage payments, additional child-care costs, burial fees etc) and not leave the dependent(s) facing as large a financial predicament as they might have had with no insurance at all at a very difficult time emotionally.
Life insurance is simple, cheap and a relatively easy sell.
But for most single people with no dependents life insurance is not necessary or as important as other types of protection. The reason being if the policy holder dies, he/she may not be concerned with any remaining debts.
It is more relevant to this person to be able to pay his/her bills in the event of diagnosis of a critical illness (CI) or long-term disability. This is also true if the breadwinner in a household only has life insurance, and he/she becomes ill and unable to work either through a CI or accident/disability. That person’s ability to earn an income and provide for the family diminishes and the life policy would only be of use if he/she were to die.
For those who think these sort of incidents only happen to other people take a look at this.
With an income protection and/or critical illness policy the payments would kick in and provide the necessary financial relief to maintain a household’s income and a roof over their heads.
Critical illness cover, like life insurance, provides a tax free lump sum and whilst life insurance tends to be bought mainly on price, CI requires more expert advice as different providers have varying definitions, degrees of cover and claims-to-payout statistics.
Whilst CI is mostly associated with being used to pay off a mortgage, it can be used for any purpose such as funding treatment not available on the NHS, pay for private treatment to bypass NHS waiting lists or even pay for an exotic holiday if that is what the policy holder and his/her close ones want.
Income Protection (IP), of which sales rose by 13.5% in 2008 according to Swiss Re, pays out a tax free monthly income and is designed to replace lost income as a result of long-term disability.
Most people tend to take their good health for granted despite the Department of Work & Pension (DWP) confirming more than two million people in the UK today have been off work for longer than six months because of an illness or accident
Without a regular income a person’s paying for today and planning for tomorrow disappears. Without an income mortgage payments, household bills, savings plans all stop.
So protecting income is incredibly important and IP plans should be considered instead of and sometimes alongside ASU or PPI policies.
An IP policy can prove exceptional value when compared with normal ASU as they can end up paying out until retirement age as opposed to 12 or 24 months. Plus they are not limited to just covering a mortgage but other household bills too although they tend to be limited to between 50% and 65% of a person’s pre-disability income to ensure potential claimants are not better off claiming on the policy than working.
Most people do not have enough savings to see them through the rainy days, most employers do not pay full pay indefinitely, even Statutory Sick Pay is limited to 28 weeks and state benefits are unlikely to be sufficient.
After countering the claim that it will never happen to them, the last remaining argument against protection is being unable to afford it.
Often, though not always, the same person will be paying £45 for satellite/digital TV, paying gym membership and not using the gym or over-spending money on food, drink or elsewhere that could be curbed.
It is not about affordability, more to do with priorities, and it is important to go through one’s finances to establish what is unncessary expenditure.
By doing a budget plan, as well as identifying where wasteful spending can be cut back, it will show the fixed financial outgoings that still need paying in the event of loss of income and therefore need protecting.
Don’t take a chance on your finance or the security of your loved ones. Take some protection advice.
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What To Do When Your ASU premium increases http://ping.fm/WPAry
With predictions for the UK’s unemployment rate to increase further from current levels of 2.2million to 3million or more, many providers of Accident, Sickness & Unemployment (ASU) insurance, a form of Payment Protection Insurance (PPI) have had to take drastic action.
Already reeling from an increasing surge in claims on their policies, providers have also seen substantially more new policies being taken out as employees seek to try and safeguard their finances before it’s too late.
Neither the number of new claims nor the amount of new business, brought on by the deteriorating market conditions, were built into the original pricing of their products.
The options for these providers, whose aim is to ensure all claims are met, include withdrawing from the market altogether (Progress from Royal Liver), restrict distribution (Halifax withdrew the product from intermediaries) or increase prices.
Existing policy holders will usually be unaffected by an insurance company withdrawing or restricting sales of their product but price hikes generally affect new and existing customers.
But as providers exit the market or limit the distribution of their products, the remaining ones will see increased demand for their policies which adds pressure to their pricing.
So if you receive notice that your premium is due to rise here are a few tips before you panic about another increased outgoing.
Firstly you may have forgotten you even had such a policy. So it is advisable to check you are still eligible to claim under it as perhaps your employment status has changed.
Or you may no longer require it – if your mortgage has been paid off, you have sufficient funds to pay your mortgage for at least 12 months in the event of unemployment or disability are a couple of reasons why you may be able to cancel the policy altogether.
It is worth checking if the policy pays out for 12 or 24 months as the latter were quite popular a few years ago but now largely unavailable so even if you can afford to pay the mortgage for a good number of months, if the policy pays out for two years for each separate successful claim, it may be a policy worth hanging onto.
Many policies offer both unemployment and accident & sickness cover which may have been right at the time but if you have changed jobs or the sick pay policy from your employer has improved you might be able to amend the policy.
If, for example, you would receive 12 months full pay for sickness absence you may be able to dispense with the Accident/Sickness/Disability element of the policy and just retain the unemployment aspect. This would result in a reduction of your premium.
Next it is worth checking if the policy was written without any excess period (the vast majority are) when perhaps now you would have sufficient resource to cover a waiting period of 30, 60, 90 or even 180 days.
This means the policy might have been set up to pay the benefit immediately but if you receive full pay for any period of a month or more, or if you have enough emergency savings, you could elect a waiting period to match your circumstances and reduce your premium accordingly. This works in much the same way as a policy excess on a motor or home insurance policy but it is a number of days as opposed to a monetary amount.
If your mortgage repayments have lowered in line with interest rate reductions you can contact your insurance company to reduce the amount of cover you require and the cost of your premium will reflect this.
The same is also true the other way – it is a good time to check any existing policies will provide sufficient cover in case you need to make a claim. If your mortgage borrowings have increased since you started the policy or if you have left the public sector and/or the sickpay at your current employer is less generous you may need to amend your policy.
Aside from amending an existing policy it can be worth switching providers altogether however it is advisable to take advice from the person who recommended the original policy or seek independent advice from an authorised person or firm.
A bank is likely to only sell you their own product, which is generally overpriced, usually poor value, often unsuitable and you will not receive advice but information only.
Also a new product may have (almost certainly for unemployment cover) an exclusion period making it impossible to claim within a set number of days from the policy inception. Whilst the policy may be better overall it could leave you exposed if you cancelled an existing policy and needed to make a claim in the first month on the new policy only to be turned down.
This is why a professional adviser is able to assist with such matters as they will guide you through the pitfalls and clearly show the benefits of each policy.
